CRM: Optimizing the Customer Experience

Every company works toward keeping customers happy in order to retain them, many going "above and beyond" to delight their customers and keep them coming back. In this article, excerpted from The CRM Handbook: A Business Guide to Customer Relationship Management, author Jill Dyche discusses making the customer relationship as optimal as possible.

This article is excerpted from The CRM Handbook: A Business Guide to Customer Relationship Management (Addison Wesley, 2001, ISBN: 0201730626).

This chapter is from the book

In his book Why We Buy, self-described retail anthropologist Paco
Underhill notes that if consumers purchased only what they really needed, the
economy would collapse. Indeed one could argue that the heady mixture of good
times and popular fads from protein bars to same-sex fragrances to sport utility
vehicles has created a veritable buying frenzy.

But consumers are fickle, and more cynical than ever before. We no longer
believe what we read and see, and for large purchases we're more inclined
to do our own research. Your company has just announced another strategic
alliance? You've got a cool new animated logo? You're on your fourth
round of venture funding? So what, so what, and so what?

Consumers are busier than ever before, and have consequently placed a premium
on their leisure time. After all, why tramp through aisle upon aisle of
merchandise when I can order groceries off the Web and spend more time with the
kids? And pizza? And dog food? And even that sport utility vehicle?

In a recent Information Week survey
1, of the
companies actively implementing CRM, 93 percent claimed that increased loyalty
and customer satisfaction would justify their CRM investment. The second-highest
percentage, 83 percent, stated the need to demonstrate increased revenue. The
implied mandate for most of these early adopters seems to be: Customer loyalty
at any cost—even if we don't see a return on investment.

It certainly doesn't take much for a consumer to turn her head to a
competing product or vendor. A jazz buff has a mental list of the CDs he wants
to buy. When CD Now e-mails him a discount code for the new Dave Brubeck record,
he goes to the site and buys it despite his hefty "wish list" on
Amazon.com.

But just as loyalty is becoming the mantra on every executive's lips,
customer satisfaction rates are plummeting. It's practically routine these
days for consumers to vow never to do business with a particular merchant for,
regardless of their frenetic embrace of the customer, companies seem to be
angering customers at a faster pace than they are serving them.

In June 2000, Fortune columnist Stewart Alsop wrote a scathing piece
on Sprint PCS and its poor service. The column, titled "Dear Sprint: You
Ticked Off the Wrong Guy," provoked hallelujahs from Sprint PCS customers,
one of whom responded:

"I hate Sprint and spend way too much time fantasizing about its
demise. I have friends who have Sprint too, and we talk to one another like
members of a support group. Whenever I'm in line at Sprint stores, I feel
it is my duty to reach out to and dissuade as many prospective customers as I
can."

Another reader weighed in with:

"To list all my horrifying experiences would render this letter too
long for publication..."

And another (with graphic metaphor):

"I'm sure you're getting a million thank-you letters from the
rest of us who have been lied to, hung up on, over-billed, underserviced, and
treated like cattle on the way to the slaughterhouse."

Treating customers like cattle is the antithesis of CRM, the goal of which is to
recognize and treat each customer as an individual. That said, if
one individual is dissatisfied, odds are she'll tell a collection of other
individuals—one widely accepted marketing rule-of-thumb claims that the
average unhappy customer tells eight other potential customers about his
negative experience. Such spreading of consumer disapproval turns the world of
viral marketing, which depends on word-of-mouth from true believers, upside
down. (Viral marketing—a phenomenon in which consumer buzz trumps
advertising as the means of a product's adoption—accounts for the
popularity of such products as Razor scooters, The Blair Witch Project,
and MAC Spice lip liner, to name a few.) Web sites such as
http://www.planetfeedback.com
and http://www.downside.com
are expanding the reach of these "viral complainers" and even
speculating on the demise of companies that proffer poor service. The influence
of such groups could in fact impact whether a product, indeed an entire company,
succeeds or fails.

Companies are spending millions of dollars trying to prevent acerbic customer
testimonials like the ones above, and to figure out the tactics that will not
only help them keep customers, but keep them coming back.

Every company is working toward keeping customers happy in order to retain
them, many going "above and beyond" to delight their customers, and
keep them coming back. Scenarios like the one below represent how
customer-focused companies like Virgin Atlantic are trying to improve the
customer experience:

You've spent two grueling weeks of non-stop business in London and are
ready to head home. Virgin Atlantic Airways sends a driver to fetch you at your
hotel and bring you the airport. Upon arrival at Heathrow, the driver stops at
an outdoor kiosk. Your window magically rolls down to reveal a uniformed Virgin
associate, who politely requests your ticket. As the associate checks you in,
the driver retrieves your luggage from the trunk—the "boot," in
the local vernacular—tags it and deposits it on the baggage conveyor belt.
The Virgin associate smiles and hands you your boarding pass.

The driver then proceeds to the terminal, pointing the way to the entrance of
the Upper Class lounge which features sleek décor, laptop hookups, and a
beauty salon. As you enter and stow your carry-on bag, a waiter asks for your
drink order. Midway through your haircut, Peter Frampton walks by on his way to
the bar and gives you a little wave. Once in-flight, you'll be offered a
pair of fleece pajamas and a free massage.

Everyone's been super friendly. In fact, you've made no special
requests, have barely lifted a finger, and still have the cash you left the
hotel with. (Declaring this a far cry from your typical airport experience would
be an understatement.) As you take the last sip of your complimentary
cosmopolitan and prepare for preferred boarding, you make a mental note:
You'll be flying Virgin Atlantic again.

Notice that this particular customer experience involved no Internet access.
Indeed, as much as CRM technologies tend to usurp its other components, customer
relationship management can be as simple as saying, "Thanks for your
business." While some customers require a level of personalized service and
specialized products that make them feel special, others simply appreciate good
manners. And this is the crux of CRM: How to differentiate customer treatment
according to individual preferences.

The Virgin Atlantic scenario exemplifies the ultimate goal of CRM. When you
recall your trip home from London, your knee-jerk recollection isn't the
cost of your ticket or your aisle seat. You remember the entire experience, from
what the airline did (the limo, the massage), to that serendipitous
extra—in this case, Peter Frampton acknowledging your existence. (Indeed, a
recent Virgin advertisement wondered aloud to a fed-up traveling public:
"Never hear of anyone cursing out the on-board masseuse, now do
you?")

In fact, many companies have recently appended their CRM or customer care
initiatives with the goal of "Owning the customer experience." The
implication here is less about controlling what happens during a customer
interaction than it is about the ability to influence how a customer perceives
her contact with the company, be it through an advertisement, ordering a
product, or calling customer support. CRM allows the company to transcend what a
customer says or does to surmise a customer's unspoken needs.

Inciting a chance encounter with a 70s rock star is probably not in most
companies' marketing plans. But there are subtler ways to give customers an
experience they will remember and that they'll look for again.

The most visionary businesses understand that singular customer experiences
will drive loyalty to levels unknown. Those who have already adopted a
customer-focused culture understand that CRM done well drives customer emotion.
It makes customers feel good, personally connected. It humanizes their
purchase or service request or complaint. These companies define the truly loyal
customer as someone who feels such good will toward the company that he
"sells" its products to others, in effect acting as a voluntary
(albeit unpaid) company agent. Moreover, he takes pleasure in proselytizing the
company and its products, in effect repeating his own positive customer
experience each time he relates his story. Harley Davidson has mastered the use
of its customers as company agents.

In their book The Experience Economy: Work is Theatre & Every Business
a Stage, B. Joseph Pine and James Gilmore argue that providing customers
with a memorable experience, along with a useful product at a reasonable price,
will become a key differentiator for companies striving to avoid the
commoditization of their services. Pine and Gilmore cite NikeTown and The Hard
Rock Café as two successful establishments that lure customers for
reasons beyond their mere product offerings. The authors assert that the
evolution from a service-based to an experience-based economy is not only
natural but also inevitable. No wonder companies have embraced CRM as a
strategic imperative: In serving a customers' unspoken needs, the
likelihood is high that you'll be serving that customer for life.